UK's big four banks account for more than half of FTSE 100's £26bn litigation spending
Barclays, HSBC, Lloyds and RBS set aside £14.6bn for litigation and regulatory costs in 2016, research finds
January 24, 2018 at 05:43 AM
3 minute read
The original version of this story was published on Law.com
The UK's four largest banks accounted for more than half of the money put aside by FTSE 100 companies to cover litigation and regulatory costs in 2016, setting aside £14.6bn between them during the year.
Research by Thomson Reuters found the FTSE 100 as a whole set aside £26.2bn to meet legal claims in 2016, with Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland accounting for 56% of this total.
The £14.6bn figure, compiled from company reports filed in 2017 for the 2016 year, is down from a record £17.3bn spent by the banks in 2015 and £31.1bn in legal and regulatory costs for the FTSE 100 as a whole.
Commenting on the level of spending by the big four banks, Berwin Leighton Paisner BLP dispute resolution partner Richard Chalk said: "I am not surprised that spending is so high, and I think that has come from the increase in regulations that the banks are subject to.
"There were also lots of investigations into banks started in previous years, and dealing with those is a factor. I certainly don't see this level of spending falling in the next 12 months."
Mishcon de Reya disputes partner James Oldnall, who sits in the firm's banking and finance group, said the spike in spending in 2015 was likely to be related to claims to have arisen from the financial crisis.
Oldnall added: "When I am litigating against banks I see cost budgets, and they have got great terms with the law firms that they use, meaning that they pay heavily discounted rates. If the other 96 FTSE 100 companies were using those same law firms, they would probably be paying a lot more, so that masks the extent to which the banks are outspending other companies."
During the same time period, oil and gas companies paid out 19% of total FTSE 100 litigation provisions, amounting to more than £5bn, while pharmaceutical companies spent £1bn, up from £612m in 2015. Provisions accounted for include litigation costs, regulatory fines and compensation.
Fourteen FTSE 100 companies reported provisions of more than £250m in their company reports, with the Thomson Reuters research stating that the level of spending shows that a "broad cross-section of UK companies have had problems in managing down the cost of legal or regulatory action taken against them".
The research further states that as a result of high expenditure levels, "litigation funders are on the march". This follows litigation funder Burford Capital revealing that it put more than $1.3bn (£933m) of investment into portfolio finance deals in 2017.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllChicago Federal Court Offers Banks Relief From Illinois' Historic Credit Fee Curbs
4 minute readTrump Mulls Big Changes to Banking Regulation, Unsettling the Industry
Coinbase Justifies wBTC Delisting by Pointing to Justin Sun Connection
4 minute readTrending Stories
- 1Decision of the Day: Judge Reduces $287M Jury Verdict Against Harley-Davidson in Wrongful Death Suit
- 2Kirkland to Covington: 2024's International Chart Toppers and Award Winners
- 3Decision of the Day: Judge Denies Summary Judgment Motions in Suit by Runner Injured in Brooklyn Bridge Park
- 4KISS, Profit Motive and Foreign Currency Contracts
- 512 Days of … Web Analytics
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250